US TSYS: All Ready with No Employment Data to Show
Oct-03 10:46
- Very unlikely the BLS September employment report is released this morning despite Sen Warren (Dem) telling CNN Thursday afternoon that the "labor data has been collected and is likely ready to be released". "Let’s be clear," Warren added, "the jobs data scheduled to come out this Friday has undoubtedly been collected and the President must release it."
- Still expected S&P Global US Services/Composite PMIs (0945ET) and ISM Services (1000ET), Bbg survey sees a small increase to 51.5 from 50.8 in a second monthly improvement after the 49.9 in May was its lowest since Jun 2024, with prices paid looking to remain elevated. MNI shutdown guide to US data releases: LINK
- Treasuries are trading mildly mixed on very light volumes: Dec'25 10Y contract (TYZ5) currently trades at 112-28.5 (-1) on cumulative volumes of 133k, 10Y yield at 4.0864% (+.0037). Curves flatter: 2s10s -.249 at 53.933, 5s30s -.544 at 101.107.
- Treasuries bounced Wednesday and the contract is holding on to its latest gains. Support at the 50-day EMA, currently at 112-12, has been pierced but remains intact. A clear break of this average would undermine a bull theme and signal scope for a deeper retracement. This would open 111-13+, the Aug 18 low and the next key support. On the upside, initial firm resistance to watch is unchanged, at 113-00, the Sep 24 high. A break would be bullish.
- Fedspeak: Expanding speaker list kicked off with NY Fed Pres Williams speaking in Amsterdam earlier ("BALANCE SHEET USE IS NOT UNCONVENTIONAL .. MONETARY POLICY TOOLS NOT LIMITED TO SHORT-TERM RATES" Bbg). Chicago Fed Goolsbee on CNBC (0830ET), Fed Gov Miran on Bbg TV (0935ET), Dallas Fed Logan moderated discussion Int Economics conf (1330ET), Fed VC Jefferson economic outlook (1340ET), Fed Gov Miran on Fox Business (1530ET).
- Politics: Limited schedule for President Trump today, participates in a Swearing-In Ceremony for the U.S. Ambassador to the Kingdom of Sweden at 1130ET (closed press). WH Press Sec Leavitt briefing at 1300ET. Expect to see social media posts from President Trump, however.
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OPTIONS: Larger FX Option Pipeline
Sep-03 10:44
- EUR/USD: Sep04 $1.1600(E1.9bln), $1.1640-50(E1.9bln), $1.1670-75(E1.7bln), $1.1700(E1.1bln), $1.1750(E1.3bln); Sep05 $1.1550(E1.4bln), $1.1600(E2.0bln), $1.1750(E1.0bln), $1.1775-80(E1.1bln), $1.1800(E1.3bln); Sep08 $1.1600(E1.0bln)
- USD/JPY: Sep04 Y147.00-15($1.4bln); Sep05 Y146.00($2.2bln), Y146.95-00($1.2bln), Y147.35-50($1.1bln)
- AUD/USD: Sep05 $0.6500-10(A$1.3bln), $0.6600(A$1.0bln)
- USD/CAD: Sep05 C$1.3850-60($1.0bln)
OUTLOOK: Price Signal Summary - USDJPY Resistance Remains Exposed
Sep-03 10:40
- In FX, despite Tuesday’s sell-off in EURUSD, the trend set-up remains bullish and the pullback appears corrective. Note that the pair has recently pierced key support around the 50-day EMA, currently at 1.1612. A clear break of the average would signal scope for a deeper retracement and potentially expose key medium-term support at 1.1392, the Aug 1 low. Initial resistance to watch is 1.1743, the Aug 22 high. A break of it would be a bullish development.
- Tuesday’s sell-off in GBPUSD undermines the recent bull theme. The pair has traded through a key support at 1.3391, the Aug 22 low. The clear break of this level signals scope for a deeper retracement and exposes 1.3315 next, 61.8% retracement of the Aug 1 - 14 bull leg. Clearance of this level would strengthen a bearish threat. For bulls, a breach of 1.3595, the Aug 14 high, is required to reinstate a bull theme. Initial resistance is at 1.3742, the 20-day EMA.
- USDJPY traded higher Tuesday. For now, the pair remains inside its range and resistance to watch is 148.78, the Aug 22 high. It has been pierced, a clear break of it would highlight a range breakout and a stronger bullish theme. This would also undermine the recent bear threat, and open 149.12, 61.8% of Aug 1 - 14 bear leg. The bear trigger lies at 146.21, Aug 14 low.
STIR: 55bp Of Fed Cuts To Year-End Ahead Of Musalem, JOLTS and Then Beige Book
Sep-03 10:30
- Fed Funds implied rates are up to 1bp higher on the day for meetings out to Mar 2026 but hold within recent ranges ahead, with little sign of net impact from crude oil futures sliding on Reuters suggesting OPEC is considering further supply hikes.
- Today’s JOLTS report sees the start of the week’s labor data build up to payrolls on Friday, with ADP coming tomorrow owing to a Labor Day delay.
- Cumulative cuts from 4.33% effective: 23bp Sep, 35.5bp Oct, 55.5bp Dec, 66bp Jan and 80bp Mar.
- SOFR futures are up to 1.5 ticks lower on the day out through 2027 contracts.
- The SOFR implied terminal yield of 3.01% (still SFRH7) is 1bp higher, off last week’s multi-month lows of ~2.95% but still pointing to more than 130bp of cuts from current levels.
- St Louis Fed’s Musalem (’25 voter, hawk) speaks on the economy and policy at the Peterson Institute at 0900ET (text tbd, Q&A). We imagine risks are skewed to the dovish side considering his usually hawkish stance. He said Aug 14 that inflation seems to be running close to 3%, he expects the tariff inflation impact to fade in 2-3 quarters but that there was a reasonable possibility it could be more persistent. He saw the labor market at full employment but with risks to the downside.
- Fed Beige Book (1400ET). With a focus on labor developments ahead of Friday’s payrolls report, recall that July’s Beige Book characterized the labor market in fairly mixed fashion, though generally stable to slightly-positive across most Fed Districts compared with the June beige book. It was arguably the most solid Beige Book on the employment front since the start of the year.
